How Microsoft Is Scaring Apple
NEW YORK (TheStreet) -- Anyone holding their breath on the hopes that software giant Microsoft(:MSFT) will once again dominate the tech sector as it did in the mid-to-late 90s should also consider investing in some scuba gear to find that ship that has long sailed -- if not sunken entirely.
The sustained dominance of Apple(:AAPL) and Google(:GOOG) will see to it that this ship remains only for discoveries in future business schools.
On the flip-side, it has also become quite clear to me that Mr. Softy has no intentions of affirming any of its tombstone epithets -- all of which now appear as having been grossly premature. But remarkably, Wall Street has yet to take notice of not only what Microsoft is today, but where it will likely be tomorrow and well into the future.
A new version of Microsoft
To fully appreciate the company's direction investors must realize that today's version of Microsoft is far different from what it was 15 years ago at the height of the PC industry. Microsoft has now realized that if it truly aspires to grow to the extent that the market can once again consider it among the ranks of Apple and Google, it must think of Windows expansion outside of the traditional PC and into the realm of mobility. To that end, it has partnered with ARM Holdings (:ARMH) to employ its chip technology in its upcoming release of Windows 8 -- a version that will be scalable to not only traditional laptops and desktops, but also to tablet and smart phone devices as well.
As noteworthy as this transition will be for the company, it seems to have fallen on deaf ears and Wall Street remains unimpressed. A considerable amount of that contempt or even skepticism has to do with the fact that Wall Street cares very little for the company's management, not only for how it has executed prior releases of Windows but also for the fact that its stock (until recently) has shown no signs of life. Right or wrong, today's version of Microsoft understands that it has a considerable amount to prove and under no circumstances can it get this wrong and expect to live and talk about it.
While the upcoming release of Windows 8 might continue to go underappreciated by Wall Street or more appropriately, analysts have decided to take a "prove it" attitude towards the launch, it has (however) not been dismissed by Apple. For all intents and purposes, this was why Apple quickly responded with its announcement of OSX Mountain Lion due out this summer. To me, it was a swift jab to the chin of Microsoft to remind investors and analysts to whom the mobile power truly belong -- regardless of how revolutionary Windows 8 is expected to be.
I am now inclined to wonder if it is possible that Apple has gotten on the defensive as a pre-emptive move to thwart off any potential momentum by Microsoft. Should investors take this as a sign that (just maybe) Windows 8 will indeed be the "game-changer" that Microsoft has been searching for since Windows 95? So clearly, for as down as the company has been perceived to be, Microsoft has been steadily working to reset its business - one that now appear to be on the verge of a resurgence aided by its partnership with Nokia(:NOK).
What is remarkable is how both Nokia and Microsoft, leaders in their respective markets have come together as a way to not only dispel the notions of their demise, but also to address their respective weaknesses -- an endeavor that if successful, has the potential to not only launch attacks on both Apple and Google but they will be able to do it from multiple directions. Another key consideration in all of this is its cloud initiative called Azure -- one that is designed to be open and flexible while enabling users to build, deploy as well as manage applications across global networks.
What makes this platform so unique and even outpaces competing products from notable cloud titans such as Oracle(:ORCL) and even from my new favorite in VMware(:VMW) is that Azure also allows easy integration of public cloud applications to existing enterprises while also enabling networks to build and run highly available applications -- all of this without focusing on the infrastructure. I have to wonder if there is a product like it on the market. The product that comes closest to Azure in terms of its revolutionary appeal is likely going to come from Red Hat (:RHT).
But even then, Microsoft is certain to leverage its existing enterprise footprint by virtue of its lead in the software and server markets for both consumers as well as corporate environments. For that matter, in addition to the upcoming release of Windows 8, the company will also be releasing a new version of Office 15 and Server 2012. So from a market that remains in constant search of these so-called "catalysts," here's a couple more.